Misappropriation of Trade Secrets, Covenants Not To Compete, Confidentiality
and Privacy Issues, Unfair Business Practices (California Business & Professions Code §17200)
The Chief Scientist at the West Coast branch of an international pharmaceutical company has resigned and started a new company with two of his direct reports. The Chief Executive of the branch and the General Counsel of the company are sure that the former Chief Scientist has misappropriated trade secrets, that he has violated his inventions agreement and his employment agreement, and that it is inevitable that in the future he and the two other employees will use additional proprietary information. The Chief Scientist denies that he has used or will use any company information, but refuses to disclose his new company’s proprietary information because he does not trust his former employer. The company intends to file an action for injunctive relief, but as often is the case in proprietary information cases, both parties desire confidentiality and a speedy resolution. Therefore the parties agree to mediate before the action is filed. In other situations, the cases are mediated while motions are pending or during the inevitable discovery battles.
The Controller of the US subsidiary of a non-US television cable company is fired after three sub-standard annual performance reviews and no reported improvement in his job performance. Within a month of each performance review, the Controller complained to a peer in the marketing department about the parent company’s accounting practices, specifically its cross-border transfer pricing. After his employment is terminated for poor performance, the Controller sues the US subsidiary and the non-US parent, along with his immediate supervisor, for wrongful termination in violation of public policy. The defendants are surprised by the lawsuit because they did not recognize or did not know about the Controller’s complaints. This scenario raises a host of legal issues and likely will result in pre-trial motions on jurisdiction over the defendants, demurrers, discovery disputes and dispositive motions after discovery. Early mediation of workplace disputes often can achieve the goals of the employer and a fair result for the employee.